AllianceBernstein Holding L.P. · NYSE:AB

AllianceBernstein Holding L.P — Q4 2006 Earnings Presentation

40 slides from AllianceBernstein Holding L.P's earnings presentation, Jan 24, 2007

  1. Slide 1: Fourth Quarter 2006 Review

    Fourth Quarter 2006 Review January 24, 2007 Lewis A. Sanders Gerald M. Lieberman Chairman & Chief Executive Officer President & Chief Operating Officer Any forecasts in this material may not be realized. Information or opinions should not be construed as investment advice. Fourth-Quarter 2006 Review

  2. Slide 2: Introduction and Forward-Looking Statements

    Introduction In light of Regulation FD, management will be limited in responding to inquiries from investors or analysts in a non-public forum. Forward-Looking Statements Certain statements in this presentation and the accompanying oral remarks are “forward-looking statements” within the meaning of

  3. Slide 3: AllianceBernstein – Fourth Quarter Highlights

    AllianceBernstein – Fourth Quarter Highlights Capital markets strong Relative performance somewhat mixed, but with substantial exceptions Strong market appreciation and net AUM inflows across all channels Summary of financial performance vs. 4Q05 AllianceBernstein (Operating) ¾ Net Revenues up 30.3%

  4. Slide 4: Market Performance - U.S.

    Market Performance - U.S. 22.2% 4Q 2006 3Q 2006 15.8% 12 Months* 8.0% 9.1% 6.7% 6.2% 5.7% 5.9% 3.9% 3.8% 4.3% 1.2% S&P 500 Russell 1000 Value Russell 1000 Growth Lehman Aggregate Bond *12 months ending December 31, 2006. Source: Frank Russell Company, Standard & Poor’s, and Lehman Brothers. Fourth-Q

  5. Slide 5: Market Performance - Non-U.S.

    Market Performance - Non-U.S. 4Q 2006 32.2% 3Q 2006 12 Months* 26.3% 20.1% 17.6% 10.4% 8.4% 4.5% 4.9% 3.9% MSCI WORLD MSCI EAFE MSCI Emerging Markets *12 months ending December 31, 2006. Source: MSCI (Morgan Stanley Capital International). Fourth-Quarter 2006 Review Proprietary - For AllianceBernste

  6. Slide 6: Relative Performance Summary

    Relative Performance Summary Value Equities performance was very strong Fixed Income outperformed, in some cases substantially Growth Equities performance generally weak, but turnaround expected Fourth-Quarter 2006 Review Proprietary - For AllianceBernstein L.P. use only AllianceBernstein 6

  7. Slide 7: Changes in Assets Under Management By Channel (Three Months)

    Changes in Assets Under Management By Channel Three Months Ended December 31, 2006 In $ Millions Institutional Private Investments Retail Client Total Beginning of Period $ 417,818 $ 153,906 $ 87,559 $ 659,283 Sales/New accounts 16,053 10,936 3,488 30,477 Redemptions/Terminations (8,202) (8,490) (89

  8. Slide 8: Changes in Assets Under Management By Channel (Twelve Months)

    Changes in Assets Under Management By Channel Twelve Months Ended December 31, 2006 In $ Millions Institutional Private Investments Retail Client Total Beginning of Period $ 358,545 $ 145,134 $ 74,873 $ 578,552 Sales/New accounts 53,800 44,313 14,436 112,549 Redemptions/Terminations (18,166) (31,030

  9. Slide 9: Changes in Assets Under Management By Investment Service (Three Months)

    Changes in Assets Under Management By Investment Service Three Months Ended December 31, 2006 In $ Millions Value Growth Fixed Index/ Equity Equity Income Structured Total Beginning of Period $ 294,303 $ 162,524 $ 173,026 $ 29,430 $ 659,283 Sales/New accounts 15,083 7,082 8,151 161 30,477 Redemption

  10. Slide 10: Changes in Assets Under Management By Investment Service (Twelve Months)

    Changes in Assets Under Management By Investment Service Twelve Months Ended December 31, 2006 In $ Millions Value Growth Fixed Index/ Equity Equity Income Structured Total Beginning of Period $ 238,231 $ 146,140 $ 164,086 $ 30,095 $ 578,552 Sales/New accounts 54,770 33,919 22,814 1,046 112,549 Rede

  11. Slide 11: Institutional Investments— Fourth Quarter Highlights

    Institutional Investments— Fourth Quarter Highlights Ended December 31, 2006 (In $ Billions) 3 months 12 months Value Equity and Blend Strategies services accounted for roughly Beginning AUM $ 418 $ 359 70% of all new assets Net Flows 6 27 Global & International services Transfers (1) - 8 comprised

  12. Slide 12: Retail— Fourth Quarter Highlights

    Retail— Fourth Quarter Highlights Ended December 31, 2006 Positive net inflows for sixth (In $ Billions) 3 months 12 months consecutive quarter Beginning AUM $ 154 $ 145 Significant increase in net asset Net Flows 2 12 inflows for full year in: Transfers (1) - (9) U.S. Retail mutual funds Global & I

  13. Slide 13: Private Client— Fourth Quarter Highlights

    Private Client— Fourth Quarter Highlights Ended December 31, 2006 Net inflows increased from the (In $ Billions) 3 months 12 months third quarter Beginning AUM $ 88 $ 75 Financial Advisor headcount Net Flows 2 8 increased to 298 – up 14.2% Transfers (1) - 1 from December 2005, including the opening

  14. Slide 14: Institutional Research Services— Fourth Quarter Highlights

    Institutional Research Services— Fourth Quarter Highlights Revenue growth of 1.9% from prior year quarter and 6.3% for the full year Revenue, adjusted for advisory fee reclassification, up 6.1% from prior year quarter and 16.2% for the full year 4Q06 revenue growth driven by London, with U.S. about

  15. Slide 15: Growth in Global Assets

    Growth in Global Assets In $ Billions $717 Billion +24% By Client Domicile By Investment Service at Dec 31, 2006 Non- F/I U.S. $177 $257 U.S. Global 36% 25% Equity $332 & Int'l U.S. $460 $540 46% $385 54% 64% 75% Non-U.S. Global & UP 44% Int’l UP 50% $579 Billion at Dec 31, 2005 Non- U.S. $179 F/I G

  16. Slide 16: Growth in Blend Strategies Assets

    Growth in Blend Strategies Assets In $ Billions Assets Under Management by Blend Strategies AUM Investment Service $134 Billion(1) $717 Billion (+52% vs. 12/31/05) Index/Structured $30 4% Growth Equities U.S. $110 Growth Blend Fixed (1) 15% Component $38 Global & Income $64 9% 28% Int'l $177 Blend 2

  17. Slide 17: AllianceBernstein Fourth Quarter Revenues

    AllianceBernstein Fourth Quarter Revenues In $ Millions Percent 4Q 2006 4Q 2005 Change Revenues: Advisory Fees $ 895 $ 668 34.1% „ See Display 18 Distribution 110 97 13.3% Institutional Research Services 89 87 (1) 1.9% - Increased stock loan brokerage activity Dividend and Interest Income 86 56 54.6

  18. Slide 18: AllianceBernstein Fourth Quarter Advisory Fees

    AllianceBernstein Fourth Quarter Advisory Fees Percent 4Q 2006 4Q 2005 Change Ending AUM (In $ Billions) $ 717 $ 579 23.9% Average AUM (In $ Billions) $ 689 $ 563 22.4% By Fee Type (In $ Millions): Base Fees $ 722 $ 576 25.5% Higher AUM and favorable mix Performance Fees 173 92 87.7% „ Primarily hed

  19. Slide 19: AllianceBernstein Fourth Quarter Operating Expenses

    AllianceBernstein Fourth Quarter Operating Expenses In $ Millions Percent 4Q 2006 4Q 2005 Change Employee Comp & Benefits $ 428 $ 341 25.4% „ See Display 20 Promotion & Servicing 164 147 11.2% „ See Display 21 General & Administrative 141 110 28.8% „ See Display 21 Interest 3 6 -53.5% Amortization o

  20. Slide 20: AllianceBernstein Fourth Quarter Compensation & Benefits

    AllianceBernstein Fourth Quarter Compensation & Benefits In $ Millions Percent 4Q 2006 4Q 2005 Change Base Compensation $ 105 $ 90 17.4% „ 14% increase in headcount and merit increases Incentive Compensation 189 146 29.4% „ Higher deferred compensation amortization and annual cash bonuses Commission

  21. Slide 21: AllianceBernstein Fourth Quarter Expenses

    AllianceBernstein Fourth Quarter Expenses In $ Millions Percent 4Q 2006 4Q 2005 Change Employee Comp & Benefits $ 428 $ 341 25.4% Promotion & Servicing 164 147 11.2% „ Higher trail payments and travel and entertainment General & Administrative 141 110 28.8% „ Expanding distribution footprint and vol

  22. Slide 22: AllianceBernstein Fourth Quarter Net Income

    AllianceBernstein Fourth Quarter Net Income In $ Millions Percent Percent 4Q 2006 4Q 2005 Change FY2006 FY2005 Change Net Revenues $ 1,187 $ 911 30.3% $ 3,950 $ 3,213 23.0% Expenses 741 609 21.6% 2,731 2,314 18.0% Operating Income 446 302 48.0% 1,219 899 35.7% Non-operating income 4 10 (1) -61.8% 20

  23. Slide 23: AllianceBernstein Holding Financial Results

    AllianceBernstein Holding Financial Results In $ Millions (except per unit amounts) Percent Percent 4Q 2006 4Q 2005 Change FY2006 FY2005 Change AllianceBernstein: Net Income $ 421 $ 290 45.4% $ 1,163 $ 868 33.9% Weighted Average Equity Ownership Interest 32.6% 31.8% 32.4% 31.7% AllianceBernstein Hol

  24. Slide 24: Q&A

    Q&A Fourth-Quarter 2006 Review Proprietary - For AllianceBernstein L.P. use only AllianceBernstein 24

  25. Slide 25: Appendix

    Appendix Fourth-Quarter 2006 Review Proprietary - For AllianceBernstein L.P. use only AllianceBernstein 25

  26. Slide 26: Market Environment

    Market Environment Annualized Cumulative 4Q 06 One Year Three Years Three Years S&P 500 6.7 15.8 10.4 34.7 Russell 1000 Growth 5.9 9.1 6.9 22.1 Russell 1000 Value 8.0 22.2 15.1 52.5 MSCI Emerging Markets 17.6 32.2 30.5 122.4 MSCI EAFE 10.4 26.3 19.9 72.5 MSCI World 8.4 20.1 14.7 50.8 Lehman Aggregat

  27. Slide 27: Relative Performance: Institutional Growth Equity (After Fees)

    Relative Performance: Institutional Growth Equity (After Fees)(1) Institutional Equity Composites vs. Benchmarks Global U.S. U.S. U.S. Emerging Int'l Lg Cap Research Large Cap U.S. Mid Cap Small Cap Markets Growth (2) Growth (3) Growth (4) Growth (5) Growth (6) Growth (7) Growth (8) 4Q 06 0.3 0.6 (1

  28. Slide 28: Relative Performance: Institutional Value Equity (After Fees)

    Relative Performance: Institutional Value Equity (After Fees)(1) Institutional Equity Composites vs. Benchmarks U.S. U.S. U.S. Emerging Diversified Strategic Strategic International Global Markets Value (2) Value (3) Value (4) Value (5) Value (6) Value (7) 4Q 06 0.0 1.5 0.2 1.0 2.6 (1.0) One Year (0

  29. Slide 29: Relative Performance: Blend Strategies Services (After Fees)

    Relative Performance: Blend Strategies Services (After Fees)(1) Blend Strategies Equity Composites vs. Benchmarks Global International U.S. Emerging Markets Blend Strategies (2) Blend Strategies (3) Blend Strategies (4) Blend Strategies (5) 4Q 06 1.5 (0.1) 0.0 (0.8) One Year 1.7 (2.4) (5.4) (3.1) Th

  30. Slide 30: Relative Performance: Institutional Fixed Income (After Fees)

    Relative Performance: Institutional Fixed Income (After Fees)(1) Institutional Fixed Income Composites vs. Benchmarks Strategic Emerging Mkt. Corp Low Global Core Plus (2) Debt (3) Bonds (4) Duration (5) Plus (6) 4Q 06 0.4 1.5 0.3 0.1 0.3 One Year 0.6 2.1 0.4 0.4 0.6 Three Years 0.4 0.7 0.2 0.3 0.5

  31. Slide 31: Absolute Performance: Private Client (After Fees)

    Absolute Performance: Private Client (After Fees)(1) Annualized 4Q 06 1 Year 3 Year 5 Year Fully Diversified Simulation (2) 5.3 12.1 10.7 8.9 S&P 500 6.7 15.8 10.4 6.2 NOTE: The information in this table is provided solely for use in connection w ith this presentation, and is not directed tow ards e

  32. Slide 32: Relative Performance: Retail Growth Equity (After Fees)

    Relative Performance: Retail Growth Equity (After Fees)(1) Retail Mutual Funds vs. Lipper Averages U.S. U.S. Global U.S. Strategic Large Cap U.S. Mid Cap Research Research Equity (2) Growth (3) Growth (4) Growth (5) Growth (6) 4Q 06 (3.1) (0.8) (1.9) (0.2) 0.1 One Year (12.0) (6.5) (10.2) (7.2) (2.0

  33. Slide 33: Relative Performance: Retail Value Equity (After Fees)

    Relative Performance: Retail Value Equity (After Fees)(1) Retail Mutual Funds vs. Lipper Averages U.S. Int'l Growth & Small/Mid Cap U.S. Global Value (2) Income (3) Value (4) Value (5) Value (6) 4Q 06 1.4 0.1 (0.0) 1.0 1.0 One Year 6.1 (1.0) (2.3) 3.2 4.0 Three Years 4.2 (1.2) (1.5) 1.2 1.4 Five Yea

  34. Slide 34: Relative Performance: Retail Fixed Income (After Fees)

    Relative Performance: Retail Fixed Income (After Fees)(1) Retail Fixed Income Funds vs. Peer Group Averages Global American Global High Yield Income Gov't Portfolio (2) Portfolio (3) Income (4) 4Q 06 0.1 1.7 2.1 One Year (1.7) 3.2 1.1 Three Years 3.4 3.3 3.9 Five Years 1.8 4.1 2.7 10 Years N/A 1.8 4

  35. Slide 35: Relative Performance: Wealth Strategies (After Fees)

    Relative Performance: Wealth Strategies (After Fees)(1) Retail Mutual Funds vs. Morningstar Averages Wealth Balanced Wealth Preservation (2) Wealth (3) Appreciation (4) 4Q 06 0.3 1.2 1.8 One Year 1.4 2.6 3.3 Since Inception (5) 1.3 1.7 2.3 NOTE: The information in this table is provided solely for u

  36. Slide 36: Investment Performance: Delivering Results for Clients

    Investment Performance: Delivering Results for Clients Net-of-Fee Annualized Relative Performance Premiums Inception Inception– Inception Inception– Bernstein Value Equities Date Dec 2006 Alliance Growth Equities Date Dec 2006 U.S. Strategic Value 31-Dec-73 + 2.7 % U.S. Growth 31-Dec-70 + 3.9 % U.S.

  37. Slide 37: AllianceBernstein Transaction Fees

    AllianceBernstein Transaction Fees In $ Millions Percent Percent 4Q 2006 4Q 2005 Change FY2006 FY2005 Change Advisory Fees As reported $ 895 $ 668 33.4% $ 2,890 $ 2,259 27.6% Reclassification to IRS 0 4 -95.8% 2 32 -94.4% Adjusted results $ 895 $ 675 34.1% $ 2,892 $ 2,291 26.2% Institutional Researc

  38. Slide 38: AllianceBernstein Consolidated Balance Sheet

    AllianceBernstein Consolidated Balance Sheet In $ Thousands, Unaudited 12/31/06 12/31/05 Assets Cash and investments $ 1,236,311 $ 999,213 Cash and securities, segregated 1,863,957 1,720,809 Receivables, net 3,488,278 2,936,245 Goodwill, net 2,893,029 2,876,657 Intangible assets, net 284,925 305,325

  39. Slide 39: AllianceBernstein Consolidated Statement of Cash Flows

    AllianceBernstein Consolidated Statement of Cash Flows In $ Thousands, Unaudited Twelve Months Ended 12/31/06 12/31/05 Cash Flows From Operating Activities: Net income $ 1,163,078 $ 868,318 Non-cash items: Amortization and depreciation: Amortization of deferred sales commissions 100,370 131,979 Amor

  40. Slide 40: AllianceBernstein trademarks notice

    AllianceBernstein® and the AB AllianceBernstein Logo are trademarks and service marks owned by AllianceBernstein L.P. Fourth-Quarter 2006 Review Proprietary - For AllianceBernstein L.P. use only AllianceBernstein 40

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